CSM Sales Performance Metrics & Analysis 3

Question 1

What is the primary difference between a 'lagging indicator' and a 'leading indicator' in sales performance measurement?

Accepted Answer

Leading indicators predict future results; lagging indicators confirm past results

Answer

Leading indicators (e.g., number of demos) predict future outcomes, while lagging indicators (e.g., closed revenue) confirm what already happened.

Question 2

A company's Customer Acquisition Cost (CAC) is $5,000 and the average Customer Lifetime Value (CLV) is $15,000. What does this CLV:CAC ratio suggest?

Accepted Answer

The ratio is healthy, indicating strong return on sales investment

Answer

A CLV:CAC ratio of 3:1 is generally considered healthy, meaning the customer generates three times the cost to acquire them.

Question 3

What does 'Average Revenue Per Account (ARPA)' help a sales manager evaluate?

Accepted Answer

The revenue efficiency and upsell potential of the customer base

Answer

ARPA reveals how much revenue each account contributes on average, helping managers assess expansion and upsell opportunities.

Question 4

A rep's average deal size has decreased 25% over two quarters despite stable close rates. Which investigation is MOST appropriate?

Accepted Answer

Assess whether the rep is discounting heavily or targeting smaller prospects

Answer

Declining average deal size with stable close rates points to discount behavior or a shift toward smaller opportunities, both of which require coaching.

Question 5

Which of the following is the MOST accurate definition of 'Net Revenue Retention (NRR)'?

Accepted Answer

Total revenue retained from existing customers including expansions minus churn and contractions

Answer

NRR measures recurring revenue from existing customers factoring in upsells, cross-sells, downgrades, and churn, showing growth from the base.

(CSM) Certified Sales Manager Practice Test

(CSM) Certified Sales Manager Practice Test

CSM Sales Performance Metrics & Analysis 3